Price cuts on original music and movie discs in Malaysia could eliminate piracy by up to 80 percent without significant losses to the legitimate media industry, said a study released last week.

Indeed, it can even boost profits.

"Giving consumers the prices they want would cut the demand for pirated movies in Malaysia by around 73% and increase profits by nearly 12%," said OWW Consulting, a specialist research consultancy based in Kuala Lumpur and Singapore.

"We take the view that since media piracy is essentially an economic crime, at least part of its solution will be found in understanding its economic causes. Our research looks at consumer behaviour, particularly their attitudes and buying patterns," the report read.

"The most important result revealed by our analysis is that price differentials between original media products and pirated alternatives appear to be the main determinant of the demand for pirated goods," it stated.

Their research looked at consumer behaviour, particularly their attitudes and buying patterns, and was conducted using web-based questionnaires to collect information on attitudes, buying patterns and demographics of consumers of pirated media.

OWW managing director Dr Geoffrey Williams, who is one of the report authors, said: "Our report is unique because we have asked consumers directly about their spending patterns rather than relying on estimates provided by companies or lobby groups."

"Our surveying approach therefore provides a more accurate way of understanding consumers and finding market-based solutions," he said.

The results of their research showed that pirated goods were widely available and even accepted as normal everyday purchases by most consumers in Malaysia.

Pirate VCDs (video compact discs) and DVDs (digital versatile discs) are sold for RM5 and RM10 respectively in the black market.

Malaysia a major exporter

The International Federation of the Phonographic Industry (IFPI) has estimated that Malaysia has capacity to produce 41 times more optical discs of all media formats than is required for domestic demand.

However, these extra units are exported and illegal optical discs manufactured in Malaysia have been seized in more than 23 countries.

The report also released statistics that estimated that media piracy causes tax losses worth RM268 million (US$72.8 million) in Malaysia.

However, industry figures put losses more than 10 times higher - at around RM2.86 billion (US$777 million).

Although the authorities in the country has made progress by enforcing anti-piracy laws through seizures, arrests and prosecutions in reducing piracy rates on music and movies from 70-80% down to around 50% over the last five years, piracy rates in software and digital games remain stubbornly high.

Some findings

  • Malaysia has capacity to produce 41 times more optical discs than is required for domestic demand.

  • These extra units are exported and illegal optical discs manufactured in Malaysia have been seized in more than 23 countries.

  • About 26% of all pirated optical discs sold in the UK come from Malaysia.

  • Giving consumers the prices they want would cut the demand for pirated movies in Malaysia by around 73% and increase profits by nearly 12%.

  • Cutting prices on software to the level that consumers are willing to pay would cut demand for pirates by nearly 80% in UK and nearly 70% in Malaysia

  • Malaysia has cut piracy rates on music and movies from 70-80% to around 50% over the last five years.

  • But piracy rates in software and digital games remain stubbornly high.

  • Around 60% of respondents in the UK say that they would never buy pirated media compared to around 5% in Malaysia.

  • Of these, 61% of the UK sample said that they do not want to support the black market compared to 33% of the Malaysian sample.